02/17/2010

Rheinmetall AG: Preliminary figures for 2009

EBIT positive after restructuring

Operating earnings in Automotive and Defence improved against forecast

• Defence showing high profitability: EBIT margin for 2009 climbs to 11.3% 
• Automotive significantly recovered: operating profit in the fourth quarter of 2009
• Liquidity improved considerably: positive group net liquidity

With positive earnings before interest and taxes (EBIT), the Rheinmetall Group exceeded its forecast for the financial year 2009. Both company divisions achieved better operating results than the most recent forecast. For 2009, Rheinmetall Defence is reporting provisional EBIT of €215 million, thus far outdoing the forecast of at least €190 million. The crisis-struck Automotive division generated a positive operating result in Q4 2009 and, in terms of the whole year, operating EBIT of -€49 million. Most recently, operating EBIT of better than -€80 million was forecast for the Automotive division. EBIT after restructuring in the Automotive division amounts to -€187 million.

As a result of the excellent performance in Defence and the effective results of the cost reduction program launched in the Automotive division at the end of 2008, the one-off expenses of €138 million for restructuring measures in Automotive were successfully compensated for in full. As forecast, the Rheinmetall Group achieved provisional EBIT of €15 million, even taking into account these further increased restructuring expenses.

The Group also improved its liquidity position significantly. Rheinmetall ended the financial year with positive net liquidity of €44 million as at 31 December 2009. On the same date the previous year, negative net liquidity of -€205 million was reported. This improvement of €249 million was aided in particular by operating measures such as the strict reduction of working capital and reduced capital expenditure, as well as a successful capital increase (inflow of €102 million).

Provisional consolidated sales of €3.4 billion

At €3,420 million, provisional consolidated sales in FY 2009 are approximately 12% below the previous year's figure (€3,869 million), which is exclusively due to the loss in revenues from Automotive. Rheinmetall Automotive achieved sales of €1,522 million, reflecting a drop of €533 million year-on-year or approximately 26%, a development typical for the Automotive sector. In contrast, Defence sales rose approximately 5% in the same period, to a current level of €1,898 million.

Rheinmetall Defence: profitability increased further

Defence raised its EBIT in the 2009 financial year to €215 million, against €194 million the previous year. With an EBIT margin of 11.3%, the profitability of the previous year (10.7%) was again exceeded.

With €3,153 million, order intake in Rheinmetall's military technology sector in 2009 reached a record level – largely driven by the award of the contract for the new Puma infantry fighting vehicle – and thereby exceeded the previous year's value of €1,723 million by 83%. This meant that the division's order backlog climbed by 39% to a current level of €4,590 million.

Rheinmetall Automotive: operating turnaround achieved in Q4 2009

The extensive package of measures for cost reduction, capacity adjustment and organizational restructuring is having a clear impact on Rheinmetall Automotive.
 
In the fourth quarter of 2009, Automotive reported sales of €410 million. The positive trend of the previous quarters in 2009 (€340 million in Q1, €376 million in Q2 and €396 million in Q3) has thus been continued. Alongside the gradual market recovery, this development is the result of Automotive’s innovative product portfolio for consumption reduction and emission control.

Thanks to the further optimized cost structure, the results situation in Q4 2009 is again taking a distinct upward turn. With provisional operating EBIT of approximately €16 million, Automotive is returning to a positive quarterly result in Q4 2009 for the first time, after -€40 million (Q1), -€21 million (Q2) and -€4 million (Q3) in the previous quarters of 2009.

The increase in restructuring expenses from an initial level of €120 million to €138 million is partly due to the fact that another production facility overseas will be closed.

Rheinmetall will publish the final figures for the financial year 2009 on 23 March 2010.